Terminal Value
Arezzo Indústria e Comércio S.A. (ARZZ3.SA)
$63.13
-1.08 (-1.68%)
| Growth in perpetuity method: | |
|---|---|
| Long-term growth rate | |
| WACC (%) | 6.83 |
| Free cash flow (t + 1) | 952.63 |
| Terminal Value | 19,723.23 |
| Present Value of Terminal Value | 14,174.64 |
Now that we’ve estimated the free cash flow generated over the five-year forecast period, we need to estimate the value of Arezzo Indústria e Comércio S.A.’s cash flows after that period (if we don’t include this, we would have to assume that Arezzo Indústria e Comércio S.A. stopped operating at the end of the five-year forecast period). To do so, we’ll determine the company’s terminal value.